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News & Current Events Discuss I have a question about Trump's tax reform plan at the General Forum; I receive daily emails about the latest news coming from the White House, and this one paragraph made me question ...

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Old 10-18-2017, 10:39 PM
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Default I have a question about Trump's tax reform plan

I receive daily emails about the latest news coming from the White House, and this one paragraph made me question it:

Quote:
The Unified Framework for Tax Reform that is supported by President Trump will mean hardworking Americans can keep more of their money. The average American household income could increase between $4,000 and $9,000 a year in wages and salary alone by cutting the Federal corporate income tax rate from 35 percent to 20 percent, according to an analysis by the Council of Economic Advisors (CEA). “Lower taxes on American business means higher wages for American workers, and it means more products made right here in the USA.” – President Donald J. Trump
I know the US corporate tax rate is too high, but don't understand how lowering it (which I believe should be done) will increase wages and salary by so much. Would this be because Trump assumes that the savings would be passed on to workers (which I don't believe will happen), or is there some other rationale, like maybe returning more manufacturing jobs here will somehow result in higher wages? Does anyone know? (I'm looking for intelligent answers from anyone who has any idea about this, not juvenile, snarky one-liners from those who seem incapable of anything else.)

I'd like to see individual income tax rates lowered, not just corporate ones. That would surely result in more disposable income for those who work to earn it.
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Old 10-18-2017, 10:54 PM
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Default Re: I have a question about Trump's tax reform plan

Quote:
Originally Posted by Lumara View Post
I receive daily emails about the latest news coming from the White House, and this one paragraph made me question it:



I know the US corporate tax rate is too high, but don't understand how lowering it (which I believe should be done) will increase wages and salary by so much. Would this be because Trump assumes that the savings would be passed on to workers (which I don't believe will happen), or is there some other rationale, like maybe returning more manufacturing jobs here will somehow result in higher wages? Does anyone know? (I'm looking for intelligent answers from anyone who has any idea about this, not juvenile, snarky one-liners from those who seem incapable of anything else.)

I'd like to see individual income tax rates lowered, not just corporate ones. That would surely result in more disposable income for those who work to earn it.
The main reason many companies keep their HQs elsewhere is because of the corporate tax...

Dropping the rate from 39% to 20% would bring these companies home...AND their cash...

The "savings" would be for companies that never left, but for those that did leave, it would be an American windfall...and influx of hundreds of billions, and "maybe" a trillion or two...

I'm not sure about higher wages, but the numbers of jobs would skyrocket...Maybe the competition for those new jobs would raise the wages...
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Old 10-19-2017, 06:59 AM
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Default Re: I have a question about Trump's tax reform plan

Quote:
Originally Posted by Lumara View Post
I receive daily emails about the latest news coming from the White House, and this one paragraph made me question it:



I know the US corporate tax rate is too high, but don't understand how lowering it (which I believe should be done) will increase wages and salary by so much. Would this be because Trump assumes that the savings would be passed on to workers (which I don't believe will happen), or is there some other rationale, like maybe returning more manufacturing jobs here will somehow result in higher wages? Does anyone know? (I'm looking for intelligent answers from anyone who has any idea about this, not juvenile, snarky one-liners from those who seem incapable of anything else.)

I'd like to see individual income tax rates lowered, not just corporate ones. That would surely result in more disposable income for those who work to earn it.

While I agree with the administration that we need to lower the corporate tax rate to incentivise corporations to return their HQ's back to the US and to remove a reason for them to leave in the first place, I think that the claim of an increase in the average American's household income is nothing but bluster. I do believe that the average household income would increase, but to put a number out like that is akin to Obama claiming that the ACA would cut insurance costs by $2500.

I just wish that our politicians lived in the real world with the rest of us and have enough confidence in their policies to be honest about the net affects of those policies. To say that incomes would increase by $4000 to $9000 due to this policy is ludicrous.
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Old 10-19-2017, 09:00 AM
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Default Re: I have a question about Trump's tax reform plan

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Originally Posted by GetAClue View Post
While I agree with the administration that we need to lower the corporate tax rate to incentivise corporations to return their HQ's back to the US and to remove a reason for them to leave in the first place, I think that the claim of an increase in the average American's household income is nothing but bluster. I do believe that the average household income would increase, but to put a number out like that is akin to Obama claiming that the ACA would cut insurance costs by $2500.

I just wish that our politicians lived in the real world with the rest of us and have enough confidence in their policies to be honest about the net affects of those policies. To say that incomes would increase by $4000 to $9000 due to this policy is ludicrous.
I agree about stating an increase to income is highly questionable.

Bringing back corporations will not only increase the number of jobs, but the ripple effect of taxes to localities, infrastructure support, businesses in proximity to the repatriated corporations expanding, etc. I believe there would be an uptick in the economy in general if they start returning.

I would hope they are not just service jobs... that we would see trade and factory type jobs returning also.
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Old 10-19-2017, 11:01 AM
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Default Re: I have a question about Trump's tax reform plan

Quote:
Originally Posted by Lumara View Post
I receive daily emails about the latest news coming from the White House, and this one paragraph made me question it:



I know the US corporate tax rate is too high, but don't understand how lowering it (which I believe should be done) will increase wages and salary by so much. Would this be because Trump assumes that the savings would be passed on to workers (which I don't believe will happen), or is there some other rationale, like maybe returning more manufacturing jobs here will somehow result in higher wages? Does anyone know? (I'm looking for intelligent answers from anyone who has any idea about this, not juvenile, snarky one-liners from those who seem incapable of anything else.)

I'd like to see individual income tax rates lowered, not just corporate ones. That would surely result in more disposable income for those who work to earn it.
My guess is that the $4000 to $9000 figure is nothing more than a SWAG, politicians love those. As to why wages would rise: Some companies would translate that tax savings into pay raises for the workers, not all by any means, but some and the companies that do that will find they have the best qualified people wanting to work for them. Also, your increased jobs will result in increased wages theory holds water. It would certainly vary by sector, but basic supply and demand says when there is more jobs, wages go up to attract the best people.
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Old 10-19-2017, 03:00 PM
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Default Re: I have a question about Trump's tax reform plan

Quote:
Originally Posted by Lumara View Post
I receive daily emails about the latest news coming from the White House, and this one paragraph made me question it:



I know the US corporate tax rate is too high, but don't understand how lowering it (which I believe should be done) will increase wages and salary by so much. Would this be because Trump assumes that the savings would be passed on to workers (which I don't believe will happen), or is there some other rationale, like maybe returning more manufacturing jobs here will somehow result in higher wages? Does anyone know? (I'm looking for intelligent answers from anyone who has any idea about this, not juvenile, snarky one-liners from those who seem incapable of anything else.)

I'd like to see individual income tax rates lowered, not just corporate ones. That would surely result in more disposable income for those who work to earn it.
it will also increase the deficit if you're worried about that.
the reasons you mentioned is why many do not like it.
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Old 10-19-2017, 03:11 PM
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Default Re: I have a question about Trump's tax reform plan

Quote:
Originally Posted by cnredd View Post
The main reason many companies keep their HQs elsewhere is because of the corporate tax...

Dropping the rate from 39% to 20% would bring these companies home...AND their cash...

The "savings" would be for companies that never left, but for those that did leave, it would be an American windfall...and influx of hundreds of billions, and "maybe" a trillion or two...

I'm not sure about higher wages, but the numbers of jobs would skyrocket...Maybe the competition for those new jobs would raise the wages...
sorry but I think you are wrong. As reagan was cutting, cutting, cutting taxes on the upper brackets, many of them chose to go overseas. Some of the regulation lowering is what did part of that,; also it was just "progress"
Merchants, business, tradesmen have always sought expansion and more markets, also cheaper labor. Without any regulating incentive at all they go overseas. They are geared toward expanding as I said.
So if business on the upper end -we're talking big players here- had MORE taxes to pay, they would still want to expand but due to tax incentives would do that here in this country.
They are so powerful now I'm sure it would be hard to reign them back in, but lowering their tax will only push them further abroad imho.
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Old 10-19-2017, 03:40 PM
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Default Re: I have a question about Trump's tax reform plan

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Originally Posted by saltwn View Post
it will also increase the deficit if you're worried about that.
the reasons you mentioned is why many do not like it.
Actually, if done correctly, it could increase revenue. If they lower the corporate tax rate and bring businesses back from overseas, that in itself will bring in more revenue to the treasury. Also, by creating a better business environment, more jobs will be created thus removing people from the government dole and turning them into tax payers. That also helps to increase revenue while reducing spending.

But your overall premise is sound. If one were really serious about the economy, they would begin by slashing government spending and then worry about tax cuts. But the by all means, cutting the corporate tax rate should be done regardless.
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Old 10-19-2017, 03:44 PM
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Default Re: I have a question about Trump's tax reform plan

Quote:
Originally Posted by saltwn View Post
sorry but I think you are wrong. As reagan was cutting, cutting, cutting taxes on the upper brackets, many of them chose to go overseas. Some of the regulation lowering is what did part of that,; also it was just "progress"
Merchants, business, tradesmen have always sought expansion and more markets, also cheaper labor. Without any regulating incentive at all they go overseas. They are geared toward expanding as I said.
So if business on the upper end -we're talking big players here- had MORE taxes to pay, they would still want to expand but due to tax incentives would do that here in this country.
They are so powerful now I'm sure it would be hard to reign them back in, but lowering their tax will only push them further abroad imho.
I tried to follow your logic, but it makes absolutely no sense. Business will always look to increase revenue and cut spending. But they also have an image to look after as it is too easy these days to paint big business in a negative light. If the climate were such that it did not hurt their bottom line to bring their business back to the US, they would jump at the chance. Rolling back some of the onerous regulations and cutting what is now the highest corporate tax rate in the world, would go a long way in attracting that business back to this country.
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